Simple Majority Voting And The Magna Carta

Some activists are continuing to submit stockholder proposals seeking the implementation of “simple majority voting”.  For example,  Morgan Stanley’s 2016 proxy statement includes the following proposal from Newground Social Investment, SPC: RESOLVED: Shareholders of Morgan Stanley hereby request the Board to take or initiate the steps necessary to amend the Company’s governing documents to provide that all non-binding matters presented

More On Inspecting The Shareholder List And The Regulation Of Alien Implants

Yesterday’s post discussed California’s “absolute” right of shareholders to inspect the shareholder list established by Section 1600 of the California Corporations Code.  Some additional points are briefly worth noting: Neither the articles of incorporation or bylaws may limit this statutory inspection right.  Cal. Corp. Code § 1600(d). The right to inspect the shareholder list is

Revoking An Irrevocable Proxy

Until 1931, California did not permit the creation of an irrevocable proxy.  With the 1931 revision of the General Corporation Law, it became possible to create an irrevocable proxy if that proxy was “coupled with an interest”.  Former Cal. Corp. Code § 2228.  The current law, which was partially based on New York’s statute , specifies

Court Rules Dissolution of Cooperative Corporation Is A Process, Not A Flash

I don’t see that many cases involving California’s Cooperative Corporation Law and so I was interested in a recent ruling by Magistrate Judge Laurel Beeler in English & Sons, Inc. v. Straw Hat Rests., Inc., 2016 U.S. Dist. LEXIS 44803 (N.D. Cal. Apr. 1, 2016).  The case arose from the desire to transition the Straw Hat pizza restaurant

Why Some Delaware Corporations Should Be Careful About Relying On This Vice Chancellor’s Ruling

Francis Pileggi in his Delaware Corporate & Commercial Litigation Blog recently wrote that there is no per se duty on the part of a closely held company to disclose financial statements .  In The Ravenswood Investment Company, L.P. v. Winmill & Co. Inc., C.A. No. 7048-VCN (Transcript) (Del. Ch. Feb. 25, 2016), former Vice Chancellor John W. Noble wrote:

California And Nevada Corporations Can Do This But Not Delaware Corporations

Sometimes it’s nice to tidy up the corporate stock book.  For example, a corporation may effect a stock split and want to collect the outstanding certificates and exchange them for new certificates reflecting the change.  California and Nevada provide a mechanism for this Delaware does not. California Corporations Code Section 422(a) provides: When the articles are

Three Questions To Ask Before Incorporating In Delaware


In the business world it was once commonly said that “no one ever was fired for buying IBM”.  Given Delaware’s preeminent market share, the same thinking may underlie a recommendation to incorporate there.  Before making that recommendation, I encourage you to consider the following three questions: Does the corporation want to pay a lot more money in

Verifying The Identity Of Directors


Sometimes, you just can’t be sure whether about the identity of a corporation’s directors.  Doubt can arise for a number of reasons.  Corporate records may be lost entirely.  Corporate records may be incomplete or inconsistent.  Corporate formalities may have been ignored.   In a sea of doubt, how does one find a safe harbor of certitude? California

What’s The Proper Interval Between Annual Meetings?

I enjoyed participating in the “Hot Issues For Your Annual Meeting” webcast yesterday.  My comments were largely focused on California and Nevada corporate law.  Roxanne Houtman of Potter Anderson Corroon LLP covered Delaware law.  Among other things, we discussed what happens when a corporation fails to hold an annual meeting of shareholders.  Although all three states provide

Is Section 141(d) Truly Oxymoronic?

Section 141(d) of the Delaware General Corporation Law provides that the directors of any corporation may “be divided into 1, 2, or 3 classes”.  It’s hard to make sense of this statement.  First, I don’t believe that Delaware legislature meant to provide that individual directors may be cut up into pieces.  A more accurate statement